This makes perfect sense from an manufacturers point. You dont pay Advertising. That way, Amway has no risk. The IBOs bear the burden for Amway.
In a way, Amway IBOs donate/dedicate much or most of their free time to doing advertising for Amway's products and services. They give absolutely free advertising to Amway at work, at school, in the office, at their church, at family barbeques, by trying to start a (fake) friendly conversation with a stranger at the local Barnes and Noble, or at local eateries, or the local supermarket. Some have coined the term "stalking" when refering to IBOs on the prowl for new prospects.
The first is, well yes, that's wonderful for Amway. But where in the world did you get the idea it was good for you? If Walmart or Costco could sell you products for a marked-up cost, and ALSO get you to do all their advertising for them, for free then why wouldn't they?
Most customers/consumers would notice that their time has value, and remember to tack it onto the cost of the products they're paying. Eventually, they would say: "Oh wait! I'm paying more for the product and donating free advertising to the company! In addition to free advertising, it is also the IBOs who recruit other salespeople to join the business and to advertise and push products for Amway.
In Amway's case, most people won't notice this because they have dollar-signs in their eyes. They have "dreams" of walking the beaches while cash rolls in forever. Amway and AMOs such as WWDB or Network 21 convinces people that they're actually making themselves rich by this behavior, not going into debt. They apparently convince people to ignore obvious facts such as your business taking a loss due to standing orders and functions. It will be cleverly diguised as investing in your business, or that you are becoming a better person, or that true success is right around the corner.
Amway now pays for advertising, but I believe it is mainly to give their IBOs some credibility. They can say "see, Amway advertises on national TV. how can they be a scam"? In reality, I don't believe that Amway advertising dollars have made a significant difference in most IBO's bottom lines.
Recently, Amway and some of their supporters reported that IBO retention is up in North America. But their report doesn't provide any evidence or even imply that IBOs are profitable.